Testimony issued by the General Accounting Office with an abstract that begins "The Federal Financial Management Improvement Act (FFMIA) of 1996 ensures that agency financial management systems routinely provide reliable and timely financial information on the investment of resources, reduced costs and programs oversight. Although many agencies are receiving unqualified opinions on their financial statements, auditor determinations of FFMIA compliance are lagging. To achieve the financial management improvements envisioned by the Chief Financial Officers Act, FFMIA, and more recently, the President's Management Agenda, agencies need to modernize their financial systems to generate reliable, useful, and timely financial information throughout the year and at year-end."

Testimony issued by the General Accounting Office with an abstract that begins "The Medicaid program served 33.4 million low-income families as well as elderly, blind, and disabled persons at a cost of $119 billion to the federal government and $88 billion to the states in fiscal year 2000. States are responsible for safeguarding Medicaid funds by making proper payments to providers, recovering misspent funds, and accurately reporting costs for federal reimbursement. At the federal level, the Centers for Medicare and Medicaid Services (CMS) is responsible for overseeing state financial activities and ensuring the propriety of expenditures reported for federal reimbursement. Audits of state Medicaid finances have identified millions of dollars of questionable or unallowable costs. In addition, annual financial statement audits have identified many internal control weaknesses in CMS oversight of state Medicaid operations. CMS has only recently begun to assess areas at greatest risk for improper payments. As a result, controls that focus on the highest risk areas and resources had not yet been deployed for areas of greatest risk. Since 1998, auditors have noted that CMS failed to institute an oversight process that effectively reduced the risk of inappropriate medical claims and payments. CMS attributed most of the …

Testimony issued by the General Accounting Office with an abstract that begins "During World War I, the U.S. Army operated a large research facility to develop and test chemical weapons and explosives in the area that became the Spring Valley neighborhood in Washington, D.C. Buried ordnance, discovered there in 1993, led to the designation by the Department of Defense (DOD) of 61 acres as a formerly used defense site. Through fiscal year 2001, DOD had spent over $50 million to identify and remove hazards at the site. The government entities involved have identified and removed a large number of hazards, but the number remaining is unknown. The health risks influencing cleanup activities at Spring Valley are the possibility of injury or death from exploding or leaking ordnance and containers of chemical warfare agents and potential long-term health problems from exposure to arsenic-contaminated soil. As of April 2002, the U.S. Army estimated that the remaining cleanup activities would cost $7.1 million and take 5 years, but these estimates are unreliable. This testimony summarized a June report (See GAO-02-556)."

Testimony issued by the General Accounting Office with an abstract that begins "The Department of Labor's Unemployment Insurance (UI) program is a federal-state partnership designed to partially replace lost earnings of individuals who become unemployed through no fault of their own and to stabilize the economy in times of economic downturn. The health of each state's UI program depends, in part, on their ability to control benefit payments by accurately determining eligibility for UI benefits in a timely manner. Labor's Office of Inspector General (OIG) and others have identified numerous aspects of the UI program that may be vulnerable to overpayments and fraud. Of the $30 billion in UI benefits paid in calendar year 2001, Labor estimates that this includes $2.4 billion in overpayments, including $560 million attributable to fraud or abuse. Labor's analysis also suggests that the states could have detected or recovered $1.3 billion of the total overpayments given their current policies and procedures. The management and operational practices at both the state and federal level contribute to overpayments in the UI program. At the state level, many states place a higher priority on quickly processing and paying UI claims than on taking the necessary steps to adequately …

Testimony issued by the General Accounting Office with an abstract that begins "The Environmental Protection Agency's (EPA) hazardous waste ombudsman was established as a result of the 1984 amendments to the Resource Conservation and Recovery Act. Recognizing that the ombudsman provides a valuable service to the public, EPA retained the ombudsman function as a matter of policy after its legislative authorization expired in 1988. Over time, EPA expanded the national ombudsman's jurisdiction to include Superfund and other hazardous waste programs, and, by March 1996, EPA had designated ombudsmen in each of its ten regional offices. In November 2001, the agency announced that the national ombudsman would be relocated from the Office of Solid Waste and Emergency Response to the Office of the Inspector General (OIG) and would address concerns across the spectrum of EPA programs, not just hazardous waste programs. Although there are no federal requirements or standards specific to the operation of ombudsman offices, several professional organizations have published standards of practice relevant to ombudsmen who deal with public inquiries. If EPA intends to have an ombudsman function consistent with the way the position is typically defined in the ombudsman community, placing the national ombudsman within the OIG does …

Testimony issued by the General Accounting Office with an abstract that begins "Since the terrorist attacks on September 11, 2001, and the subsequent anthrax incidents, there has been concern about the ability of the federal government to prepare for and coordinate an effective public health response given the broad distribution of responsibility for that task at the federal level. More then 20 federal departments and agencies carry some responsibility for bioterrorism preparedness and response. The President's proposed Homeland Security Act of 2002 would bring many of these federal entities with homeland security responsibilities--including public health preparedness and response--into one department to mobilize and focus assets and resources at all levels of government. The proposed reorganization has the potential to assist in the coordination of public health preparedness and response programs at the federal, state, and local levels. There are concerns, however, about the proposed transfer of control of public health assistance programs that have both basic public health and homeland security functions from Health and Human Services to the new department. Transferring control over these programs, including priority setting, to the new department has the potential to disrupt some programs critical to basic public health responsibilities. The President's proposal is …

Testimony issued by the General Accounting Office with an abstract that begins "Medicare has paid higher than market rates for various medical equipment and supplies and often considerably higher than provider acquisition costs for Medicare-covered outpatient drugs. Congress has enacted a series of legislative changes affecting payment methods and payment adjustment authority for medical equipment and supplies and outpatient drugs since the late 1980s. However, progress in setting appropriate rates has been mixed, owing, in part, to various constraints faced by the agency responsible for administering Medicare--the Centers for Medicare and Medicaid Services (CMS). Because of the program's size, scope, and role as a public payer, Medicare has limited options to set and adjust payments for medical equipment, supplies and outpatient drugs. Medicare's method of paying for medical equipment and supplies is through fee schedules that remain tied to suppliers' historical charges to Medicare rather than market prices. Medicare's payment approaches lack flexibility to keep pace with market changes, and, as a result, Medicare often pays higher prices than other public payers. Previous efforts to lower Medicare's overly generous payments suggest several lessons. First, payment changes are most effectively implemented when the process used to set or adjust a rate …

Testimony issued by the General Accounting Office with an abstract that begins "The federal government has spent billions of dollars attempting to reduce the consumption of petroleum in the transportation sector for over 25 years. Throughout the period, the government has tried tax incentives, mandates to use vehicles that run on alternative fuels, and laws designed to enhance fuel efficiency. More recently, the federal government conducted a $1.2 billion partnership between industry and government, the Partnership for a New Generation of Vehicle, to develop a highly fuel-efficient car. The administration has proposed a new initiative, known as FreedomCAR, focused on developing hydrogen fuel cells that will provide the technology necessary to create cars and trucks that do not require petroleum and have no polluting emissions--without sacrificing safety or convenience. FreedomCAR will operate as a cooperative research effort between the Department of Energy and General Motors, Daimler-Chrysler, and the Ford Motor Company. The FreedomCAR initiative should make sure that it (1) performs research that private industry would not do on its own, (2) specifies a clear and measurable goal, (3) devises a strategy to directly address that goal, and (4) considers whether consumers will buy the products resulting from the research …

Testimony issued by the General Accounting Office with an abstract that begins "Identity theft involves "stealing" another person's personal identifying information, such as their Social Security number, date of birth, or mother's maiden name, and using that information to fraudulently establish credit, run up debt, or take over existing financial accounts. Another pervasive category is the use of fraudulent identity documents by aliens to enter the United States illegally to obtain employment and other benefits. The prevalence of identity theft appears to be growing. Moreover, identity theft is not typically a stand-alone crime; rather identity theft is usually a component of one or more white-collar or financial crimes. According to Immigration and Naturalization Service (INS) officials, the use of fraudulent documents by aliens is extensive, with INS inspectors intercepting tens of thousands of fraudulent documents at ports of entry in each of the last few years. These documents were presented by aliens attempting to enter the United States to seek employment or obtain naturalization or permanent residency status. Federal investigations have shown that some aliens use fraudulent documents in connection with more serious illegal activities, such as narcotics trafficking and terrorism. Efforts to combat identity fraud in its many forms …

Testimony issued by the General Accounting Office with an abstract that begins "This testimony describes China's development of rule of law practices related to the commitments China made to the World Trade Organization (WTO), which it joined in November 2001. When China joined the WTO, it agreed that its legal measures would be consistent with its WTO obligations. GAO found 60 commitments that specifically obligate China to enact, repeal, or modify trade-related laws or regulations. In addition, China has made a substantial number of other WTO commitments related to the rule of law in transparency, judicial review, uniform enforcement of laws, and nondiscriminatory treatment. Chinese government officials described how their efforts for reform go beyond China's WTO commitments and include broad reforms of laws and regulations at the national and provincial levels, as well as reforms of judicial and administrative procedures. However, Chinese officials acknowledged the challenges they face in completing the necessary reforms and identified the need for outside training assistance. According to GAO's survey, U.S. businesses in China consider rule of law-related WTO commitments to be important, especially the consistent application of laws, regulations, and practices in China, and enforcement of intellectual property rights. However, a majority of …

Testimony issued by the General Accounting Office with an abstract that begins "The District of Columbia Superior Court has made progress in planning the transition of its Family Division to a Family Court, but some challenges remain. The Superior Court's transition plan addresses most, but not all, of the required elements outlined in the District of Columbia Family Court Act of 2001. Significantly, the completion of the transition hinges on timely completion of a complex series of interdependent plans intended to obtain and renovate physical space to house the court and its functions. All required space may not be available, as currently planned, to support the additional judges the Family Court needs to perform its work in accordance with the act, making it uncertain as to when the court can fully complete its transition. Although not required as part of its transition plan efforts, the Superior Court has begun to coordinate its activities with social services agencies in the District. However, the court and agencies face challenges in achieving coordinated services in the longer term. Finally, the development and application of the District of Columbia Courts' Integrated Justice Information System will be critical for the Family Court to be able …

Testimony issued by the General Accounting Office with an abstract that begins "The Immigration and Naturalization Service (INS) developed strategies in the 1990s to control illegal immigration across U.S. borders and to address enforcement priorities within the country. In 1994, INS's Border Patrol issued a strategy to deter illegal entry through "prevention through deterrence;" that is, to raise the risk of being apprehended for illegal aliens to where they would consider it futile to try to enter. The plan called for targeting resources in a phased approach, starting in areas with the greatest illegal activity. In 1999, INS issued its Interior Enforcement Strategy to focus resources on areas that would have the greatest impact on reducing the size and annual growth of the illegal resident population. The strategy established the following five areas: (1) identify and remove criminal aliens and minimize recidivism; (2) deter, dismantle, and diminish smuggling or trafficking of aliens; (3) respond to community reports and complaints about illegal immigration; (4) minimize immigration benefit fraud and other document abuse; and (5) block and remove employers' access to undocumented workers. For these to be effective, INS needs better data to determine staff needs, reliable information technology, clear and consistent …

Testimony issued by the General Accounting Office with an abstract that begins "The Department of Veterans Affairs (VA) spent $500 million and the Department of Defense (DOD) spent $240 million for medical and surgical supplies in fiscal year 2001. Since the 1980s, To achieve greater efficiencies through improved acquisition processes and increased sharing of medical resources, VA and DOD signed a memorandum of agreement in 1999 to combine their buying power. VA and DOD saved $170 in 2001 by jointly procuring pharmaceuticals, by agreeing on particular drugs to be purchased, and contracting with the manufacturers for discounts based on their combined larger volume. VA and DOD have not awarded joint national contracts for medical and surgical supplies as envisioned by their memorandum of agreement, and it is unlikely that the two departments will have joint national contracts for supplies anytime soon. However, a few VA and DOD facilities have yielded modest savings through local joint contracting agreements. The lack of progress have made in jointly contracting for medical and surgical supplies has, in part, been the result of their different approaches to standardizing medical and surgical supplies. Other impediments to joint purchasing have been incomplete procurement data and the inability …

Testimony issued by the General Accounting Office with an abstract that begins "This testimony discusses Social Security Administration (SSA) improvements in the claims process for its two disability programs, Disability Insurance (DI) and Supplemental Security Income (SSI). Managing its disability caseloads with fair, consistent, and timely eligibility decisions in the face of resource constraints has become one of SSA's most pressing management challenges. SSA has spent more than $39 million over the past 7 years to test and implement initiatives designed to improve the timeliness, accuracy, and consistency of its disability decisions and to make the process more efficient and understandable for claimants. These have included efforts to improve the initial claims process as well as handling appeals of denied claims. The results to date have been disappointing. SSA's two tests to improve the initial claims process produced some benefits; however, both initiatives as tested would have significantly raised costs, and one would have lengthened the wait for final decisions for many claimants. As a result, SSA is considering additional changes to one of these initiatives and has shelved the other. One initiative to change the process for handling appealed claims in SSA's hearing offices has resulted in even slower …

Testimony issued by the General Accounting Office with an abstract that begins "As new technologies that depend on the radio spectrum continue to be developed and used more widely, managing the spectrum can grow increasingly challenging. The current legal framework for domestic spectrum management evolved as a compromise over the questions of who should determine the distribution of the spectrum among competing users and what standard should be applied in making this determination. Although initially, all responsibility for spectrum management was placed in the executive branch, this responsibility has been divided between the executive branch for managing federal use and an independent commission for managing non-federal use since 1927 . The current shared U.S. spectrum management system has processes for allocating spectrum, but these processes have occasionally resulted in lengthy negotiations between the Federal Communications Commission and the National Telecommunications and Information Administration (NTIA) over allocation issues. The United States also faces challenges in effectively preparing for World Radiocommunication Conferences. NTIA has several activities to encourage efficient spectrum use by federal agencies, but it lacks the assurance that these activities are effective. NTIA is required to promote efficiency in the federal spectrum it manages, which included more than 270,000 federal …

Testimony issued by the General Accounting Office with an abstract that begins "The Federal Transportation Administration's (FTA) New Starts Program helps pay for designing and constructing rail, bus, and trolley projects through full funding grant agreements. The Transportation Equity Act for the 21st Century (TEA-21), authorized $6.1 billion in "guaranteed" funding for the New Starts program through fiscal year 2003. Although the level of New Starts funding is higher than ever, the demand for these resources is also extremely high. Given this high demand for new and expanded transit facilities across the nation, communities need to examine approaches that stretch the federal and local dollar yet still provide high quality transit services. Although FTA has been faced with an impending transit budget crunch for several years, it is likely to end the TEA-21 authorization period with $310 million in unused New Starts commitment authority if its proposed fiscal year 2003 budget is enacted. Bus Rapid Transit is designed to provide major improvements in the speed and reliability of bus service through barrier-separated busways, buses on High Occupancy Vehicle Lanes, or improved service on arterial streets. GAO found that Bus Rapid Transit was a less expensive and more flexible approach than …

Testimony issued by the General Accounting Office with an abstract that begins "The Department of Defense (DOD) faces complex financial and management problems that are deeply rooted in DOD's business operations and management culture. During the past 12 years, DOD has begun several broad-based departmentwide reform efforts to overhaul its financial operations and other key business areas. These efforts have been unsuccessful. GAO identified several key elements that are essential to the success of any DOD financial management reform effort. These include (1) addressing the department's financial management challenges as part of a comprehensive, integrated, DOD-wide business reform; (2) providing for sustained leadership and resource control to implement needed reforms; (3) establishing clear lines of responsibility, authority, and accountability for such reform; (4) incorporating results-oriented performance measures and monitoring tied to the reforms; (5) providing appropriate incentives or consequences for action or inaction; (6) establishing and implementing an enterprise architecture to guide and direct financial management and modernization investments, and (7) ensuring effective oversight and monitoring."

Testimony issued by the General Accounting Office with an abstract that begins "The United States spent $50 billion (2002 dollars) on food aid between 1979 and 2003. Notwithstanding these sizable donations and donations by other countries, the need for food aid in the developing world far exceeds available supply. U.S. food aid is provided through six programs administered by the Department of Agriculture and the U.S. Agency for International Development (USAID). These programs use various methods for providing resources and have different ways of delivering aid to the recipient nations. USAID manages the largest program--P.L. 480, Title II--using annual appropriations to purchase commodities that are then donated to recipient nations principally through private voluntary organizations and the World Food Program. The large fluctuations in U.S. food aid since 1990 are the result of three key factors: U.S. food aid policies, agricultural surpluses, and international events. The success of food aid programs in meeting their objectives is hampered by the competing objectives of the programs and by management weaknesses such as a lack of management attention to monitoring and accountability in food aid programs."

Testimony issued by the General Accounting Office with an abstract that begins "Social Security not only represents the foundation of our retirement income system; it also provides millions of Americans with disability insurance and survivor's benefits. Although the Social Security Trustees now project that under the intermediate or "best estimate" assumptions the combined Social Security Trust Funds will be exhausted 3 years later than in last year's estimates, the magnitude of the long-term funding shortfall is virtually unchanged. Without reform, Social Security, Medicare, and Medicaid are unsustainable, and the long-term impact of these entitlement programs on the federal budget and the economy will be dramatic. Social Security reform is part of a larger and significant fiscal and economic challenge. Absent reform, the nation will ultimately have to choose between persistent, escalating federal deficits, significant tax increases, or dramatic budget cuts. Focusing on trust fund solvency alone is not sufficient. Aiming for sustainable solvency would increase the chance that future policymakers would not have to face, on a recurring basis, the difficult questions of whether the government will have the capacity to pay future claims or what else will have to be squeezed to pay those claims. Comparing the beneficiary impact …

Testimony issued by the General Accounting Office with an abstract that begins "The Commercial Activities Panel is a congressionally mandated panel to study, and make recommendations for improving, the policies and procedures governing the transfer of commercial activities from government to contractor personnel. The growing controversy surrounding competitions under the Office of Management and Budget's Circular A-76 to determine whether the government should obtain commercially available goods and services from the public or private sectors led to the establishment of this Panel. In establishing the Panel, several steps were taken to ensure representation from all major stakeholders as well as to ensure a fair and balanced process. To ensure a broad range of views on the Panel, a Federal Register notice was used to seek suggestions for the Panel's composition. As the Panel began its work, it recognized the need for a set of principles for sourcing decisions. These principles provide for an assessment of what does or does not work in the current A-76 process and provide a framework for identifying needed changes. Many of the Panel's recommendations can be accomplished administratively under existing law, and the Panel recommends that they be implemented as soon as practical. The Panel …

Testimony issued by the General Accounting Office with an abstract that begins "Since the terrorist attacks of September 2001, and the subsequent anthrax incidents, there has been concern about the ability of the federal government to prepare for and coordinate an effective public health response to such events. More than 20 federal departments and agencies carry some responsibility for bioterrorism preparedness and response. Emergency response is further complicated by the need to coordinate actions with agencies at the state and local level, where much of the response activity would occur. The President's proposed Homeland Security Act of 2002 would bring many of the federal entities with public health preparedness and response responsibilities into one department to mobilize and focus assets and resources at all levels of government. The proposed reorganization has the potential to repair the fragmentation in the coordination of public health preparedness and response at the federal, state, and local levels. In addition to improving overall coordination, the transfer of programs from multiple agencies to the new department could reduce overlap among programs and facilitate response in times of disaster. However, there are concerns about the proposed transfer of control from the Department of Health and Human Services …

Testimony issued by the General Accounting Office with an abstract that begins "Since September 11, the President and Congress have taken aggressive steps to protect the nation, including creating an Office of Homeland Security (OHS); passing new laws, such as the USA Patriot Act and an emergency supplemental spending bill; establishing a new agency to improve transportation security; and working with federal, state, and local governments, private sector entities, non-governmental organizations and other countries to prevent future terrorist acts and to bring those individuals responsible to justice. More recently, Congress and the President have proposed greater consolidation and coordination of various agencies and activities. The President has proposed establishing a Department of Homeland Security (DHS) and has sent draft legislation to Congress. This testimony focuses on two major issues: (1) the need for reorganization and the principles and criteria to help evaluate what agencies and missions should be included in or left out of the new DHS and (2) issues related to the transition, cost, and implementation challenges of the new department."

Testimony issued by the General Accounting Office with an abstract that begins "The over accumulation of vegetation is a serious problem, particularly in the interior West, where it is causing an increasing number of uncontrollable and destructive wildfires. The policy response to this was the development of the National Fire Plan--a long-term multibillion dollar effort to address wildland fire threats. GAO's work on wildland fires identified three needs: (1) a cohesive strategy to address growing threats to national forest resources and nearby communities from catastrophic wildfires, (2) clearly defined and effective leadership to carry out that strategy in a coordinated manner, and (3) accountability to ensure that progress is being made toward accomplishing the goals of the National Fire Plan. Two years ago, the Forest Service and the Department of the Interior developed strategies to address these problems, and recently established a leadership entity to respond to the need for greater contingency coordination. Whether the strategy and the council will serve as the framework and mechanism to effectively deal with the threat of a catastrophic wildland fire will depend on how well the National Fire Plan is implemented. To determine the effectiveness of this effort, a sound performance accountability framework …

Testimony issued by the General Accounting Office with an abstract that begins "Federal, state, and local governments, and the private sector, are taking steps to strengthen the safety and security of the American people, including actions to strengthen border and port security, airport security, health and food security and to protect critical infrastructure. There are date, information-sharing, and technology challenges facing the country in developing and implementing a national preparedness strategy. The nature of the terrorist threat makes it difficult to identify and differentiate information that can provide an early indication of a terrorist threat from the mass of data available to those in positions of authority. Further, the nation faces considerable cultural, legal, and technical barriers in effectively collecting and sharing information. Many technologies key to addressing threats are not yet available, and many existing technologies have not effectively been adapted for the threats the country now faces. The real challenge, however, is not just to find the right solutions to each of these problems but to weave solutions together in an integrated and intelligent fashion."